Sun Capital Cooks Up Acquisition for Johnny Rockets Burger Chain

Sun Capital Partners has regained its appetite for the restaurant industry with the acquisition of burger chain Johnny Rockets Group Inc ., the firm confirmed Tuesday through a spokesperson.

Sun Capital declined to disclose terms of the transaction or comment any further on the deal, which was reported earlier by Nation’s Restaurant News.

John Fuller, Johnny Rockets’ chief executive, said the company has about $300 million in annual revenue.

The firm acquired the restaurant chain from Red Zone Capital Management, a McLean, Va., investment firm co-founded by Daniel Synder, owner of the Washington Redskins football team. Red Zone bought the restaurant chain back in 2007 out of RedZone Capital Fund II, LBO Wire reported at the time.

Red Zone wasn’t available for comment.

Based in Aliso Viejo, Calif., Johnny Rockets was founded in 1986 and serves hamburgers, fries and shakes in an atmosphere that evokes a 1950s diner. The company has about 300 corporate and franchise-owned restaurants in 30 states and 16 countries, according to its website.

Sun Capital’s latest transaction marks the firm’s first platform investment in the sector in at least two years. That said, Sun has plenty of experience in the space with investments in restaurant chains that include Captain D’s, a seafood restaurant chain that the firm is gearing up to sell.

Sun Capital held a first close on $1 billion for its latest vehicle, Sun Capital Partners VI LP, at the end of 2012 and plans to raise $3 billion for the vehicle.

Fuller said the company’s financial adviser North Point Advisors initiated a sale process in December, with the first round of bids due in January. Sun Capital prevailed in the auction and became the new sponsor.

Despite Sun’s typical focus on distressed and turnaround situations, the investment in Johnny Rockets wasn’t a turnaround story, said Fuller.

“We are a growth company,” said Fuller, adding that the number of total restaurant doubled over the last six years, in part driven by international growth.

About 90% of the company’s restaurants are franchisee-owned, with the remainder company-owned. Over the next 12 months, Johnny Rockets plans to open 60 new restaurants including 40 outside of the U.S., said Fuller.

India and Brazil are among the new international markets that the burger chain intends to enter next year, he said. The company already has presence in such countries as Russia, Kuwait and the Philippines.